TQA Cat 6 Process Management


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TQA Cat 6 Process Management

  1. 1. Process Management Concepts and Insights Bill Voravuth
  2. 2. 10 Critical Questions: Process Management1. How do you design and innovate your overall work SYSTEM (how the work of your organization is accomplished)? 2
  3. 3. Is this a system ?Dr. Russell L. Ackoff, father of operations research, cited in a keynote address on systems engineering in University of Pennsylvania 3
  4. 4. Is this a system ?Dr. Russell L. Ackoff, father of operations research, cited in a keynote address on systems engineering in University of Pennsylvania 4
  5. 5. Then, what is a system ? SYSTEM (from Latin systēma, in turn from Greek σύστημα systēma) A set of INTERACTING and INTERDEPENDENT ELEMENTS forming an integrated WHOLE to serve a PURPOSEThe word system in its meaning here, has a long history which can be traced back to Plato (Philebus), Aristotle(Politics) and Euclid (Elements). It had meant "total", "crowd" or "union" in even more ancient times, as it derivesfrom the verb sunìstemi, uniting, putting together 5
  6. 6. National Aeronautics and Space AdministrationA “system” is a construct or collection ofdifferent elements that together produceresults not obtainable by the elements alone.the ELEMENTS, or PARTS, can includepeople, hardware, software, facilities,policies, and document; that is, all thingsrequired to produce system-level results. The“VALUE ADDED” by the system as a whole,beyond that contributed independently by theparts, is primarily “CREATED BY THERELATIONSHIP AMONG THE PARTS”;that is, how they are interconnected. 6
  7. 7. Why we need systems ? “The WHOLE is greater than the SUM OF ITS PARTS”Dr. Russell L. Ackoff, father of operations research, cited in a keynote address on systems engineering in University of Pennsylvania 7
  8. 8. Very important system criteriaKNOW or DECIDE on your system boundary 8
  9. 9. NASA system, elements, and boundary 9
  10. 10. 10 Critical Questions: Process Management 1. How do you DESIGN and INNOVATE your overall work system?Mohanbir Sawhney, Robert C. Wolcott, Inigo Arroniz of Northwestern University. Article in MIT Sloan Management Review 2006 10
  11. 11. On innovation 11
  12. 12. On innovation 12
  13. 13. On innovation 13
  14. 14. On innovation 14
  15. 15. On innovation 15
  16. 16. On innovation 16
  17. 17. On innovation 17
  18. 18. On innovation 18
  19. 19. On innovation 19
  20. 20. On innovation 20
  21. 21. On innovation 21
  22. 22. On innovation 22
  23. 23. On innovation 23
  24. 24. 10 Critical Questions: Process Management2. How do your work systems and key work processes (your most important internal value creation processes) relate to and capitalize on your CORE COMPETENCIES? 24
  25. 25. Core Competencies AREAS OF GREATEST EXPERTISE of an organization which:• DELIVERS stakeholder-perceived VALUE and enable business to succeed• Is RARE and DIFFICULT for our existing or potential competitors TO COPY• EXTENDS ACROSS key services, products, processes, systems, and markets WITH organizational SETUP TO UTILIZE IT 25
  26. 26. 10 Critical Questions: Process Management2. How do your work systems and key work processes (your most important internal value creation processes) relate to and CAPITALIZE on your core competencies? Manufacturing NO ! 26
  27. 27. Core competencies - best practices a variety of external data to help them• The organization uses identify their core competencies.• Objectivity and reliability of data sources used to help determine core competencies.• The organization has identified 4-6 major core competencies as opposed to a long list. consistent with the organization’s• The 4-6 core competencies identified appear reputation, position in the market, and past performance. 27
  28. 28. Core competencies - best practices consistent with the organization’s• The core competencies are mission and core business.• Major processes that are not identified as core competencies and these are farmed out to contractors/suppliers or partners, as appropriate.• The organization periodically reviews its list of core competencies to determine if they are still valid or need to be revised.• Core competencies identified make it likely that the organization will be able to accomplish its major action plans or strategies outlined in the strategic plan. 28
  29. 29. FAQ’s on relationships between: Core Competencies Work Systems Work ProcessesHarry Hertz - MBNQA Director - present 29
  30. 30. Core Competencies vs. Strategic Advantages Strategic Resources & Relationships (External) Core Competencies (Internal)• Marketplace benefits/attributes that influence likelihood of future success• Frequently sources of success relative to competitors 30
  31. 31. 10 Critical Questions: Process Management2. How do your work systems and KEY WORK PROCESSES (your most important internal value creation processes) relate to and capitalize on your core competencies? 31
  32. 32. What is a process ?• ALL WORK is a process.• EVERYTHING YOU DO is a process. 32
  33. 33. The Nestcafé Process 33
  34. 34. The Starbucks Process 34
  35. 35. Why process ? Procedures Methods Products People Services INPUTS Skills PROCESS OUTPUTS Information Training Knowledge Paperwork Information(including specifications) A PROCESS CONVERTS INPUTS INTO OUTPUTS 35
  36. 36. NASA process 36
  37. 37. NASA process levels 37
  38. 38. Why Process Management ? 38
  39. 39. Why Process Management ? Moving from Functional to Process View (Westin Hotel) Reservation ProcessSales & Marketing Sales & Marketing Food & Beverage Food & Beverage Check-in Process Front Desk Front Desk Check-out Process Food Preparation Process Food Delivery Process Functions drive Processes are Processes drive the business acknowledged, but the business function dominate 39
  40. 40. Why Process Management ? Example of Core and Sub-Processes (Westin Hotel) Westin Core Processes Rooms Events Outlets Customer Check- in Reservations Acquisition Check- out Scheduling Food Preparation Room Services Food Preparation Food Delivery Housekeeping Room Setup Room SetupPresentation/KTS implementation/ Eckes for APQC 2006 40
  41. 41. First step in mapping process – SIPOC diagram Car Dealer Example Suppliers Inputs Process Outputs Customers Requirements Manufacturer  Cars  See Below  New Client Account  Car Buyer  Color Selection Supplier  Option Packages  Paperwork to State  Dealership  Build to Order Gas Station  Fuels for Cars  Paperwork to Dealer Owners  Paperwork filed Wash Center  Car Washes  Paperwork to  Department of within 24 hours of Printer  Car Needs Worksheets Manufacturer Motor Vehicles Car Purchase  Payment  Service  Cashier Check or  Service Contract Department Money Order  Service Notifications Understand Present Options Agree on Sign Paperwork Meet with Client Needs to Client and Options, Price, and Hand Over New Client in New Car Test Drive Cars and Delivery Keys/ Title Date 41
  42. 42. Second step in mapping process – flowchartA. Determine the boundariesB. List the stepsC. Sequence the stepsD. Draw appropriate symbolsE. System modelF. Check for completenessG. Finalize the flowchart 42
  43. 43. Process mapping - best practices 43
  44. 44. Process mapping - best practices 44
  45. 45. Process mapping - best practices No Receives AlertFind and Arrive at scene Does Direct Security Does Does Complete Call taxi 911/CER Yes Medical calls into SCC to indicate if and assess Communication impacted person require Yes impacted person have No Remain on Emergency Team and Go to B available. If available to condition of need to be Center that 911/ nonambulance transportation someone who is a nonblue cross scene till Medical Report and give out A respond, obtain details of impacted person called if CER should be for further medical employee who could come pick ride arrives route to Corp Safety voucher event such as location, etc and treat hasn’t? called attention? them up? Coord. No End Yes · Arrive at scene · Direct CER if called to the Is Does *Applies typically Contract-First Does Call taxi andSecurity* site, and stay until they leave this Med impacted personContract responders are impacted person give out · No Was No Yes to Eagan CPR and first-aid Assist medical team if Emerg occur- require nonambulance have someone who is a No C present 911/CER nonblue cross employee voucher and trained ing during transportation notify Security · Perform crowd control if called? who could come pick business for further medical Communication necessary them up? · Gather data for the event and hours? Yes attention? Yes Notify Security report back to SCC End No Yes Communication Obtain: Wait for resolution. Call 911/CER · Name of impacted person if Complete gathering available information from the · Name of reporting party reporting party, contract · Call back # and office # of the security and medical team reporting party and document in the Med Emerg Medical Injury Report form Description of the event from the Eagan reporting party Where is the indicating if person was Security Communication list? Needs to transported be formalized Does impacted call 911/CER Center (SCC) Go to Impact Eagan Begin to fill out Is party exhibit any of the Business on Receive Is the Yes Campus the Medical this Medical symptoms/injuries on the list that notification of an location District Yes Injury Report Emergency occurring may require 911/CER? e.g. Go to event type- Office, Eagan Campus, form with the during BCBSMN · Severe breathing B Instruct reporting party help is on the medical or Northern reporting party business hours? · Shortness of breath way- emergency Campus? on-line. · Chest pain · Medical team has been called Notification may be · Signs of stroke received via: Northern Dispatch Medical · Request not to move the District Team via AlertFind impacted person · Phone call to Campus Office No indicating if 911 · Request someone to stand in security officer in SCC at X21212 No has been called aisle to direct medical team when (SCC is available 24 they arrive hrs) Instruct reporting party help is on the way- · If CER was called instruct · In person via lobby Go to Go to · Request not to move the impacted someone to meet them at door or communication ME Northern ME District Is 911/CER No person center · Direct Campus Office needed? · If CERS were called request if someone Dispatch Go to is available to meet them at door when contract observation by Yes C they arrive. Security Corporate Call 911/ Security Staff CER Receive Emergency Does Go to No Medical Team Report investigation A investigate Yes End several days after the need to Coordinator event. occur? Corporate Safety No Receive report from Was AlertFind after Review report along Does Consult notification notifying Medical team with AlertFind and medical team Yes filth Yes indicating which team Incident report if need to be Medical received of first report of Go to members responded requested consulted? Team to the emergency. injury? First report No of injury *CER=Community Emergency Responder 45
  46. 46. 10 Critical Questions: Process Management3. What are your KEY WORK PROCESSES? 46
  47. 47. 3 steps to finding your key work processes STEP 1A. Based on what your KEY CUSTOMERS tell you, what does your organization provide them that they VALUE?B. What are the MAIN PRODUCTS or SERVICES that key customers expect to buy or receive from you and what are the PROCESSES that produce each?C. What are the STEPS FROM the INPUT of materials and/or information TO the OUTPUT (the product or service)?D. How would you NAME THE PROCESS for internal identification? 47
  48. 48. 3 steps to finding your key work processes STEP 2 A. Which processes are essential to your CORPORATE PURPOSE? B. Which processes COST THE MOST in terms of time and money? C. Which processes will HELP YOU COMPETE in the future? 48
  49. 49. 3 steps to finding your key work processes STEP 3RATE each process using these questions:A. How central is the process to our organization’s STRATEGIC PLAN and COMPETITIVE SUCCESS?B. How central is the process to ATTRACTING NEW CUSTOMERS and RETAINING EXISTING ONES?C. Which processes do KEY CUSTOMER feel are central to their SATISFACTION AND LOYALTY? (And don’t assume you know the answer. Ask them.) 49
  50. 50. 10 Critical Questions: Process Management4. How do you determine the KEY REQUIREMENTS FOR THESE PROCESSES and what are they? 50
  51. 51. Process requirements - best practices• Requirements are identified for all Key Work Processes.• customer or other Requirements come from research on stakeholder needs.• Asystematic process is used to define requirements for each process.• Requirements are checked periodically to see if customer/stakeholder needs and priorities have changed. 51
  52. 52. Process requirements - best practices• Requirements research is through and appears valid.• Requirements are specific versus generic.• Requirements appear to drive customer buying behavior and loyalty when met.• Requirements for processes clearly link to important outcomes or output measures. 52
  53. 53. 10 Critical Questions: Process Management5. How do you DESIGN and INNOVATE your work processes TO MEET THESE REQUIREMENTS? 53
  54. 54. Process design & innovate - best practices• Systems for communicating relevant information to product/service design personnel.• systems are used and have helped improve the design process on specific products/services.• Use of cross-functional product/service design and review teams.• input is sought from diverse sources in the organization early in the design process when the input will be most valuable. 54
  55. 55. Process design & innovate - best practices• Involvement of operations/production personnel on design teams.• Thoroughness of design reviews so as to include all appropriate production/operational variables.• Link between customer requirements, process metrics, and standards for production/delivery processes associated with new products/services. 55
  56. 56. 10 Critical Questions: Process Management 6. How do you ensure that the DAY-TO-DAY OPERATION of these processes meets their key process requirements? 56
  57. 57. Day to day operation – best practices• Evidence thatcontrols are in place to ensure that process requirements are met.• Existence of documentation for key processes where it is required.• Scope and development of training on meeting process requirements.• Use of the best technology affordable to ensure process compliance.• Deployment of approaches like “lean enterprise” or “six sigma” where appropriate.• In-process measures are tracked on a real-time or frequent basis and fed back to appropriate personnel.• information fromsuppliers/partners is considered where appropriate to set process standards and develop controls. 57
  58. 58. 10 Critical Questions: Process Management7. What are the KEY PERFORMANCE MEASURES and IN-PROCESS MEASURES used to control and improve these processes? 58
  59. 59. SIPOC Metrics Suppliers Inputs Process (Billing Process Example) Outputs Customers • Billing Department Start Step 2 Step 3 Step 4 •A Staff Step 1 •X • Customer • Delivered •B Database Invoice •Y •C • Shipping Info End Step 7 Step 6 Step 5 •Z • Order Info Step 8 Input Metrics Process Metrics Output Metrics• Staff • System Responsiveness Expertise • Accuracy of order Info • Rework Percentage at Each • Invoice• System • Accuracy of shipping Info Step Accuracy Quality Up-Time • Accuracy of Database Info • Number of Process Steps • Time to Receive order Info • Time to Complete Invoice • Invoice Cycle Cycle • Time to Receive Shipping Info • Time to Deliver invoice Time Time • Delay Time Between Steps • Number of Billing Staff • Invoices Processed/Month • Number of Process Steps • Cost per invoice Cost and Variability 59
  60. 60. Measures & metrics – best practices• Evidence that customer requirements and desires are reflected in process measures and standards.• Approach to process control is preventive in nature.• Use of valid statistical procedures for analyzing process data.• Use of established and acceptable model for cause analysis.• Thoroughness and rigor of cause-analysis process.• Clear linkages between customer requirements, process measures, and standards. 60
  61. 61. Benchmarking ProcessClassification Framework 61
  62. 62. 10 Critical Questions: Process Management8. How do you CONTROL the OVERALL COSTS of your work processes and PREVENT defects, service errors, and rework? 62
  63. 63. Process control – Lean Six Sigma 63
  64. 64. Process control - best practices• Adequate sample sizes are used for testing to ensure overall product quality.• Testing/inspection is performed frequently enough to detect possible problems.• Automated equipment is used where possible to remove human error and judgment from inspections/tests.• Inspectors/auditors are thoroughly trained and there are reliability checks on their work.• Auditors/inspectors are objective and have no incentive to pass poor quality work.• Auditors/inspectors are given proper authority to do their jobs. 64
  65. 65. Process control - best practices• Testing/inspection methods evaluated for effectiveness and efficiency are and changed or improved as necessary.• instruments/tools are calibrated frequently. Auditing/inspection• Efforts to minimize inspection and testing by building in more prevention-based approaches.• Outside audits/inspections are done, if appropriate, to supplement internal data.• Evidence is shown of a prevention-based approach to ensuring product/service quality. 65
  66. 66. 10 Critical Questions: Process Management 9. How do you IMPROVE your work processes to improve performance, reduce variability, and improve products, services, programs, and/or outcomes? 10. How are improvements and lessons learned SHARED with other units and processes to drive learning and innovation? 66
  67. 67. Process analysis - เครื่ องมือคุณภาพ 7 ชนิด กราฟ (Graph) ผังและเหตุผล (Cause & Effect diagram) ผังการกระจาย (Scatter diagram) แผ่ นตรวจสอบ (Check sheet) ผังภูมิควบคุม (Control chart) ผังพาเรโต (Pareto diagram) ฮิสโตแกรม (Histogram) 67
  68. 68. Process improvement – best practices• Process improvement activities are directly linked to goals and strategies outlined in the strategic plan.• Use of a consistent model or approach for process analysis and improvement.• Scope of process improvement activities focus on a few critical success factors rather than having everyone work on improving their processes.• Teams or groups used to analyze and improve processes include members that are carefully selected for their expertise-having everyone participate in improvement teams is often a disaster. 68
  69. 69. Process improvement – best practices• Deployment of a systematic process analysis and improvement model throughout all parts of the organization.• Adequacy of training and coaching on use of process improvement model.• Process improvement is not always a reaction to performance problems—a preventive approach is preferred.• Use of outside data on technology, competitors, customer needs, and other factors to drive process improvement. 69
  70. 70. Process improvement – best practices• Consideration of the interaction between processes when selecting one to improve.• Alternative models were considered before adopting an approach to process analysis/improvement.• Link between process improvements and results shown in Category 7.• Process improvements implemented in one part of the organization are systematically shared with others and implemented where appropriate.• Systematic analysis of new changing technology as a means and for identifying process improvement opportunities. 70
  71. 71. Process improvement – best practices• different stimuli used as impetus for process improvement efforts. Number of• Use of competitor or benchmark data as stimuli for identifying opportunities for process improvement.• Process analysis is used as a stimulus for process improvement. 71
  72. 72. Back Up 72